What is Cryptocurrrency Mining

Decntralized Transcation Processing

Cryptocurrency Mining in a nutshell is the process of recording transactions to a decentralized public ledger. The block Chain is the decentralized public ledger that the transactions are recorded on. The block chain reports prove that the transactions happened, and confirms those transactions within the network. Nodes distinguish legitimate transactions from fraudulent or duplicative spending attempts and ensures that cryptocurrency can’t be spent elsewhere.

Did you wonder why mining equipment was intentionally designed to consumes a lot of energy and require application specific integrated circuits or are memory intensive? Cryptocurrency mining was designed to be difficult as a way to even out the distribution of the currency over time. The Cryptocurrency Mining industry would already be over if all the currency was mined within the first year. Ensuring a level distribution of daily found blocks provides stability to the decentralized market.

The purpose of cryptocurrency mining is to process the decentralized transactions and allow the nodes a tamper resistant consensus. In addition to processing transactions, Mining is also used to introduce additional cryptocurrency into the system on a yearly basis. Miners receive transaction fees as well as a portion of newly created coins. This double edged sword allows new cryptocurrency to be introduced in a decentralized fashion and motivates the general public to provide security for the system.